Title
Chief Administrative Office recommending the Board decline to authorize the issuance of Tax and Revenue Anticipation Notes (“TRANs”) on behalf of various school districts, thus allowing those school districts to issue such TRANs in their own name.
FUNDING: N/A
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DISCUSSION / BACKGROUND
On June 23, 2020 with Legistar item 20-0805, at the request of various local school districts, the Board of Supervisors took action to allow those school districts to issue Tax and Revenue Anticipation Notes (“TRANs”). On January 19, 2021, County Counsel and the Treasurer-Tax Collector received a letter on behalf of those same school districts (collectively referred to herein as the “Districts”) notifying the County of their desire to issue another series of TRANs in the following cumulative maximum amounts:
• El Dorado Union High School District: new cumulative amount of $20,000,000 from $10,000,000
• Gold Trail Union Elementary School District: cumulative amount of $1,000,000
• Lake Tahoe Unified School District: new cumulative amount of $10,000,000 from $7,000,000
• Rescue Union Elementary School District: cumulative amount of $5,000,000
TRANs are a form of short-term borrowing used to manage cash flow when revenues and expenditures are uneven over the course of a fiscal year. Though the notes may mature up to fifteen months after issuance, they are payable solely from the revenue received or accrued during the fiscal year within which they are issued. Additionally, such notes are limited to an amount up to 85% of the issuer’s estimated taxes to be collected, income, revenue, cash receipts, and other moneys available for making note payments.
The procedure to authorize issuance of TRANs is set forth in Government Code section 53853. It provides that, for school districts that have not been accorded fiscal accountability status, the notes may be issued by the Board of Supervisors. However, when the notes are to be issued in conjunction with other notes (i.e.,...
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